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Question:

DIRECTIONS: Study the following graph to answer the given question.

Percentage profit earned by two companies A and B over the given years

% Profit = \(\cfrac{(Income – Expenditure)}{(Expenditure)}\)     × 100


For Company A, its income in 2000-2001 was equal to its expenditure in 2003- 2004. What was the ratio of respective expenditures in these two years?
Options:
A) 4:5
B) 3:2
C) 5:3
D) Cannot be determined
E) None of these
Solution:

Let the income of Company A in 2000-01 = Rs. x = Expenditure of Company A in 2003-04

Profit % in 2000-01 = 25%

⇒ \(\cfrac{(x – Expenditure)}{Expenditure }\)    = \(\cfrac{25}{100}\)

⇒ Expenditure in 2000-01 = Rs. \(\cfrac{4x}{5}\)   —(1)

As discussed earlier,

Expenditure in 2003-04 = Rs. x  —(2)

Ratio of expenditures in 2000-01: 2003-04

= (\(\cfrac{4x}{5}\)): x

Thus, required ratio is 4 : 5

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